Principality mortgages aim to support Help to Buy scheme

Principality Building Society is planning to launch mortgage products to help more first-time buyers and next-time movers in England.

From the end of May, Principality will offer mortgages through intermediaries only initially, to support those buying a new-build property via the UK government-backed Help to Buy England scheme.

The society will be offering five-year fixed rates at 75 per cent loan to value (LTV) and these products will come with a free standard mortgage valuation.

Craig Hall, new build manager at Legal & General Mortgage Club, said: “Helpto Buy has now assisted almost 160,000 completions to date in England. It is great to see Principality extending its participation in the scheme and further supports its commitment to the new-build sector. This follows recent proposition improvements including six plus six (months) offers and 90 per cent LTV on new-build houses and flats.”

Provider view:

Julie-Ann Haines, chief customer officer at Principality Building Society, said: “We hope these products will help to support a wide range of borrowers, including first-time and next-time buyers, to own their home. This goal is one that is very close to our own hearts, helping people to prosper throughout their lives.

“We’ve responded to broker feedback by introducing Help to Buy England products to our range of intermediary mortgages. We continually review our products to ensure we are relevant in the market place and are providing the products clients are looking for."

Adviser view:

Stuart Phillips, director at Aalto Mortgages, said: “It is a product I would offer customers. Broader choice and more competition is always better for the industry and lenders showing support for brokers is welcomed.

“Personally I have some reservations about the Help To Buy scheme because we are seeing customers that signed up five years ago facing issues. While prices have risen, wages have not, and during that time greater restrictions have come into play, meaning some buyers may find they are not in a position to buy out the Help to Buy loan, and may be forced to choose from a very small selection of Help to Buy remortgage choices.

“They may also find their ability to sell and buy on is restricted because they have to repay such a large chunk of that equity, and they are still restricted by affordability rules going forward.”

Fees/charges:

There is no pricing or charging information at this time.

Verdict:

The Help to Buy scheme is a very attractive prospect for people who are trying to get on the mortgage ladder and more competition will always be welcomed by IFAs. However, caution should be taken, because as the first set of Help to Buy schemes mature, the proof of their success will be how many owners have truly been left better off.